By Michael R. Hobbs

Quick. What's one plus one?

Sometimes it's not two, say people who have watched as large corporations in many of America's industries have merged to become even larger corporations.

One result often is less overall charitable giving by the combined firms, says Gene Tempel, executive director of the Indiana University Center on Philanthropy.

"Corporate mergers have a major impact," Tempel says. "They cause a decline in corporate giving."

Bolstered by economic growth, corporate America in recent years has expanded its philanthropy.

But that economic growth also has allowed many firms to grow by acquiring other firms. When that happens, one city's large corporate headquarters suddenly becomes the branch office of some other city's corporate headquarters.

That's happening in Indianapolis, Tempel says, where the two firms that own the city's two major banks now are themselves merging, leaving the city with no locally owned major bank.

When that happens, he says, communities like Indianapolis can expect a decline in giving to local nonprofits, Tempel says. "Decision-making often leaves and goes to the corporate office," he says.

When that happens, the city that's home to the larger corporation may benefit from the growth. Such has been the case with Charlotte, N.C.

The city has seen its hometown companies NationsBank, First Union and Duke Power grow into national entities. NationsBank most recently announced a merger with San Francisco-based BankAmerica. First Union has just completed a merger with CoreStates Financial of Philadelphia. And Duke Power became Duke Energy with its acquisition of PanEnergy Corp., a gas company from Houston.

The growth has enabled those firms to give to their hometown as they never have before.

For example, the Arts and Science Council of Charlotte/Mecklenburg recently completed a fundraising drive in which First Union employees contributed more than $1 million. It was the largest employee campaign for an arts council in the nation, says Mary Eshet, a First Union spokesperson.

First Union long has been involved with the arts council and the local United Way, she says.

"It's a long-standing commitment and those organizations would say First Union has always been a key contributor," she says. "But our ability has grown as we've grown."

First Union works to ensure that when it acquires a bank that the local community still will benefit from corporate giving.

In the merger with CoreStates, the two banks announced they would establish a $100 million charitable foundation to serve the Philadelphia area. First Union also has committed to maintaining local corporate giving at a pace set by CoreStates, which amounts to $17 million a year, she says.

"Dedication to the community is a value that CoreStates and First Union share," Eshet says "I think that value was very important to the people who made this deal come together.

She says the bank's giving and volunteer programs will appear larger in Charlotte because that's where the company has most of its employees.

"But our efforts are corporatewide," she says. "It's important not to concentrate everything in the headquarters city. Even in small communities, you'll see First Union being very active,"

Large firms need to demonstrate they are committed to all the communities they serve, says Steve Rochlin, manager of research at the Center for Corporate-Community Relations at Boston College.

Some firms do that well, but many do not, he says.

"It presents a very difficult challenge for the companies in question," he says.

"The smartest companies will work some kind of arrangement to allow for some kind of decentralized budget," he says. "But there are instances in which communities have gotten left behind."

Companies need to be proactive and plan for the merger of corporate giving programs, he says.

That's what officials with Duke Energy have been doing, says Dock Kornegay, director of the newly named Duke Energy Foundation.

Kornegay says they've learned that the giving programs of Duke Power and PanEnergy were very similar. Each had areas of focus in human services, education, community development and the environment.

"I think the numbers of dollars and commitment to basic organizations will not change," he says.

The Duke Energy Foundation's budget for the Carolinas this year is $8.4 million, Kornegay says. The budget for giving in the Houston area is $2.8 million, he says. The combined amount will be about the same as that given by the two firms last year, he says.

He says some local groups ask whether Duke Energy will be making greater contributions in the Charlotte area.

"Any city in which a corporate office is located is going to get additional attention. That's just natural," he says. "But we don't do that as strongly as many companies do."

He says any increased giving by Duke Energy would be in areas into which the company is moving.

The combined firm also is working to assure local groups that while some details of giving programs may change, the basic commitment still is there, Kornegay says.

Michael R. Hobbs can be reached at
mrhobbs@mindspring.com